JCX-8-92 Description of S.1294 (Tax Simplification Act of 1991) and Proposed Modifications Scheduled for Markup by the Senate Committee on Finance on March 3, 1992 (March 3, 1992). JCX-9-92 Estimated Revenue Effects of Chairman's Mark (Revised) March 3, 1992). JCX-10-92 Estimated Budget Effects of Senate Finance Committee Amendment to H.R. 4210 (March 10, 1992). JCX-11-92 Estimated Budget Effects of S.2325 (Family Security Initiatives Act of 1992) as Reported by the Senate Finance Committee (March 10, 1992). JCX-12-92 Estimated Budget Effects of H.R. 4210, as Passed by the House and Senate (Conference-Revised) (March 18, 1992). JCX-13-92 Estimated Budget Effects of H.R. 4210, as Agreed by the House and Senate Conferees (March 24, 1992). JCX-14-92 Action to Authorize Further Amendment to H.R. 2056 (Shipbuilding Trade Reform Act of 1992) Prepared for the Committee on Ways and Means (March 30, 1992). JCX-15-92 Description of Revenue-Related Provisions of H.R. 776 ("Comprehensive National Energy Policy Act") Scheduled for a Hearing Before the House Committee on Ways and Means on April 28, 1992 (April 27, 1992). JCX-16-92 Markup of Revenue-Related Provisions of H.R. 776 ("Comprehensive National Energy Policy Act") and Additional Energy Tax Provisions Scheduled for a Markup by the House Committee on Ways and Means on April 29, 1992 (April 28, 1992). JCX-17-92 Markup of Ways and Means Committee Amendment to H.R. 4691 (Airport and Airway Safety, Capacity, and Intermodal Transportation Act of 1992) (April 28, 1992). JCX-18-92 Description of H.R. 65, H.R. 1733, and H.R. 1870 Scheduled for a Hearing Before the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means on May 21, 1992 (May 19, 1992). JCX-19-92 Proposal to Limit Deduction for Executive Compensation Scheduled for a Hearing Before the Senate Finance Subcommittee on Taxation on June 4, 1992 (June 3, 1992). JCX-20-92 Issues Involved in Possible Revenue Options to Reduce the Federal Deficit Scheduled for a Hearing Before the Subcommittee on Deficits, Debt Management, and International Debt of the Senate Committee on Finance on June 5, 1992 (June 4, 1992). JCX-21-92 Description of Revenue Provisions for H.R. 5260 (Unemployment Compensation Amendments of 1992) Scheduled for a Markup by the Senate Committee on Finance on June 11, 1992 (June 10, 1992). JCX-22-92 Chairman's Mark of the Revenue-Related Provisions of H.R. 776 ("Comprehensive National Energy Act") Scheduled for Markup by the Senate Committee on Finance on June 16, 1992 (June 16, 1992). JCX-23-92 Description of a Proposal to Extend Certain Expiring Tax Provisions, Repeal the Luxury Excise Tax on Certain Items, and Adopt Revenue-Raising Provisions Scheduled for Markup by the Senate Committee on Finance on June 16, 1992 (June 16, 1992). JCX-24-92 Chairman's Mark of Revenue-Related Provisions (Enterprise Zones, Extension of Certain Expiring Tax Provisions, Tax Simplification, Intangible Assets, Real Estate, Luxury Excise Tax, Taxpayer Bill of Rights, Technical Corrections, and Certain Revenue-Raising Provisions) and Subcommittee Proposals Scheduled for a Markup by the House Committee on Ways and Means on June 24, 1992 (June 23, 1992). JCX-25-92 Ways and Means Committee Estimated Budget Effects of Chairman's Mark (June 24, 1992). JCX-26-92 Description of H.R. 2922 ("Lead-Based Paint Hazard Abatement Act") Scheduled for a Hearing Before the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means on July 1, 1992 (June 30, 1992). JCX-27-92 Present Law and Issues Relating to Misclassification of Employees and Independent Contractors for Federal Tax Purposes Scheduled for a Hearing Before the Subcommittee on Select Revenue Measures of the House Committee on Ways and Means on July 23, 1992 (July 22, 1992). JCX-28-92 Description of Chairman's Mark to H.R. 11 (Revenue Act of 1992) Scheduled for Markup Before the Senate Committee on Finance on July 29, 1992 (July 28, 1992). JCX-29-92 Estimated Revenue Effects of the Chairman's Mark (July 29, 1992). JCX-30-92 Access to Tax Information by the Department of Veterans' Affairs: H.R. 5008 (Dependency and Indemnity Compensation Reform Act of 1992), Scheduled for Markup in the Committee on Ways and Means, August 5, 1992 (August 4, 1992). JCX-31-92 Discussion of Revenue Estimation Methodology and Process (August 4, 1992). JCX-32-92 Estimated Budget Effects of H.R. 11, as Reported by the Senate Committee on Finance (August 4, 1992). JCX-33-92 Proposals and Issues Relating to the Financial Condition of the Pension Guaranty Corporation (PBGC) Scheduled for a Hearing Before the Subcommittee on Oversight of the House Committee on Ways and Means on August 11, 1992 (August 10, 1992). JCX-34-92 Comparison of Revenue-Related Provisions of H.R. 776 as Passed by the House and Senate (September 25, 1992). JCX-35-92 Comparison of Estimated Budget Effects of RevenueRelated Provisions of H.R. 776, as Passed by the House and the Senate (September 25, 1992). JCX-36-92 Comparison of Estimated Budget Effects of H.R. 11, as Passed by the House and as Passed by the Senate (October 1, 1992). JCX-37-92 Estimated Budget Effects of Conference Agreement for Revenue-Related Provisions of H.R. 776 (October 5, 1992). JCX-38-92 Estimated Budget Effects of Conference Agreement to H.R. 11 (Revenue Act of 1992) (October 6, 1992). IRS INFORMATION PAMPHLETS Following are several useful IRS tax publications available free of charge from IRS Form Distribution Centers: Publication 1 Your Rights as a Taxpayer (see Part VIII) Publication 17 Your Federal Income Tax Publication 225 Farmer's Tax Guide Publication 448 Federal Estate and Gift Taxes Many other general guides and specialized publications are also available free from the IRS. Many of these publications are listed in Publication 17, which also contains information on how to order the publications. PART IV. THE FEDERAL TAX SYSTEM Section 1. The Individual Income Tax A. HISTORICAL INTRODUCTION An income tax was first enacted in the Revenue Act of 1862 (Ch. 119, 12 Stat. 432) to finance the Civil War. The tax was repealed a decade later in 1872. The individual income tax made a second, brief appearance as part of a 1894 revenue act enacted during the second administration of President Cleveland. The tax was abolished as a result of the Supreme Court decision in Pollock v. Farmer's Loan and Trust Company, 158 U.S. 601 (1895), that the imposition of the individual income tax was a violation of clause 4 of Article I, section 9 of the United States Constitution, which prohibits "direct" taxation without apportionment among the States. As a result of Pollock, it was clear that in the absence of a constitutional amendment, Congress lacked the power to levy an individual income tax. Nearly 20 years after the Supreme Court's decision in Pollock, the 16th amendment was ratified on February 25, 1913. Under the 16th amendment, Congress has the power to collect taxes "on incomes from whatever source derived," without apportionment among the States. Several months later, Congress enacted the individual income tax as part of the Revenue Act of 1913. In its initial form, the income tax was designed to affect only a small number of households, and by the standards of today, in a modest way. For married couples, the tax did not apply to taxable incomes less than $3,000. The top marginal rate was 7 percent, and applied to taxable income over $500,000 (table 1). Since that time, the individual income tax has grown to be the most significant single source of Federal revenue. In 1992, the individual income tax raised $476.5 billion, or 44 percent of all Federal receipts (table 2). Over the last 3 decades, the individual income tax has represented a fairly stable share of total revenues—almost half. During the 1980s, its share slipped slightly as legislated increases in payroll taxes caused that share to grow relative to other tax sources (table 3 of this section and tables 1 and 3 of Part V, "Historical Tables"). B. OVERVIEW Two basic economic principles underlie the structure of the individual income tax: efficiency and equity. These two principles can conflict with one another. Some measures designed to increase equity may result in less economic efficiency; similarly, measures which achieve greater economic efficiency may be less equitable. The principle of efficiency implies that the best tax is one which interferes as little as possible with individuals' choices regarding |